A company is considering the purchase of new equipment for $45,000. the projected annual net cash flows are $19,000. the machine has a useful life of 3 years and no salvage value. management of the company requires a 12% return on investment. the present value of an annuity of $1 for various periods follows: period present value of an annuity of $1 at 12% 1 0.8929 2 1.6901 3 2.4018 what is the net present value of this machine assuming all cash flows occur at year-end? multiple choice $(1,768) $3,000 $634 $19,000

Respuesta :

Compute present value
Pv=net annual cash flow×interest factor at (12%,3years)

Pv=19,000×2.4018=45,634

Net present value
Pv of annual cash flows-project investment
45,634−45,000=634..answer